Bond Yields Rise; U.S., UK Debt Worries

Mayank Mehta
24 Mar, 2010
New York City

Stocks in U.S. and Europe traded lower on the worries that rising sovereign debt will crimp nascent recovery. U.S. and UK bond yields advanced. New home sales in the U.S. declined, factory orders gained. EU leaders struggle to devise a bailout plan for Greece. UK debt plans drag the pound.

[R]4:10 PM New York – Stocks in U.S. and Europe traded lower on the worries that rising sovereign debt will crimp nascent recovery. U.S. and UK bond yields advanced. New home sales in the U.S. declined, factory orders gained. European Union leaders struggle to devise a bailout plan for Greece. UK borrowing plans drag the pound.[/R]

U.S. stocks traded lower after new home sales declined and factory orders increased more than anticipated. The dollar gained against the euro after Portugal debt was downgraded.

Lennar surged after it reported sharply smaller loss in the first quarter. Adobe Systems soared 6% after it quarterly sales increased 9% and net surged 19%. MF Global surged after it appointed former chairman of Goldman Sachs chief Jon S. Corzine as new chairman and CEO.

European markets traded lower and the euro declined for the third week in a row as Greece faces a deadline to refinance its debt. Fitch downgraded sovereign debt rating of Portugal with negative outlook. Industrial new orders in the euro zone declined.

European leaders negotiate details of Greece bailout that may involve the IMF. ArcelorMittal aims to produce 100 million tons of iron ore a year by 2015. Gameloft SA soared 8% after the publisher and developer of video games said 2009 revenues rose 10.6%. Commerzbank increased on the estimate of first quarter profit.

Chancellor of Exchequer Alistair Darling trimmed his budget deficit forecast by 8% to 567 billion over the next five years. He also targeted budget deficit to shrink from 11.8% to fall to 4% by April 2015. The government plans to borrow £185.4 billion in the fiscal year beginning April. The pound edged lower.

North American Markets

Dow Jones Industrial Average decreased 52.68 or 0.5% to close at 10,836.15, S&P 500 Index edged lower 6.45 or 0.6% to 1,167.72 and Nasdaq Composite Index declined 16.48 or 0.7% to close at 2,398.76. Toronto TSX Composite Index fell 80.34 or 0.7% to 11,964.20.

Latin American Markets Indexes

Mexico Bolsa Index decreased 110.97 or 0.3% to 33,250.30 and Brazil Bovespa Stock Index decreased 444.32 or 0.7% to 68,942.40.

Europe Markets Review

In London FTSE 100 Index closed higher 4.25 or 0.07% to 5,677.88, in Paris CAC 40 Index decreased 2.74 or 0.07% to close at 3,949.81, in Frankfurt DAX index higher 21.73 or 0.36% to close at 6,039.00. In Zurich trading SMI increased 2.79 or 0.04% to close at 6,879.95.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 40.88 or 0.38% to 10,815.03, and Hang Seng index in Hong Kong increased 20.84 or 0.10% to 21,008.62, and CSI 300 index in China higher 1.10 or 0.03% to 3,276.67. ASX 200 index in Australia increased 16.70 or 0.34% to 4,891.50. The FTSE Bursa KL Composite index in Malaysia was higher 4.60 or 0.35% to 1,309.45.

The Kospi Index in South Korea decreased 0.81 or 0.05% to close at 1,681.01. SET index in Thailand closed higher 4.06 or 0.52% to 786.54. JSE Index in Indonesia increased 53.99 or 1.98% to 2,774.85. Markets in India were closed today.

Commodities, Metals, and Currencies

Crude oil decreased $1.34 to $80.57 a barrel for a front month contract, natural gas edged down 4 cents to $4.09 per mBtu and gasoline decreased 3.78 cents to 222.50 cents.

Soybean future closed down 8.00 cents to $9.60 a bushel. Wheat futures decreased 0.75 cents in Chicago trading to $4.76 a bushel. Sugar closed up 1.10 cents at 17.67 cents per pound.

Gold decreased $17.00 in New York trading to close at $1,086.70 per ounce, silver closed down $0.41 to $16.65 per ounce and copper for the front month delivery decreased 4.95 cent to $3.329 per pound.

Dollar edged higher against euro to $1.332 and advanced against the Japanese yen to 92.15.

Yield on 10-year U.S. bonds closed higher at 3.83% and with 30-year maturities increased at 4.72%.